TMI Blog2010 (7) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... 32 or 132A of the Act had been carried out is finalized, the Revenue can take action at any time in the absence of any specific limitation prescribed in the statute - The satisfaction having been recorded and the proceedings initiated after finalization of the block assessment in the case of S. K. Bhatia's group on March 30, 2005, the same were bad in law - Decided in favour of the assessee - 591 of 2009 - - - Dated:- 20-7-2010 - ADARSH KUMAR GOEL, AJAY KUMAR MITTAL, JJ. JUDGMENT Ajay Kumar Mittal J.- 1. In this appeal filed under section 260A of the Income-tax Act, 1961 (in short "the Act"), at the instance of the Revenue it has been submitted that the following substantial question of law arises in this appeal for the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endered Rs. 2.75 crores. The assessee had claimed that the unaccounted transactions with the Bhatia group were covered in the surrender made on February 19, 2003. The Assessing Officer did not accept this and finalized the assessment on September 28, 2007, at undisclosed income of Rs. 91,96,083 under section 158BC read with section 158BD of the Act. The assessee feeling dissatisfied preferred an appeal to the Commissioner of Income-tax (Appeals) (in short "the CIT(A)"). The appellate authority accepting the contention of the assessee, deleted the addition, vide order dated June 30, 2008. The Revenue's appeal to the Tribunal was dismissed by accepting the preliminary plea of the assessee that assumption of jurisdiction under section 158BD of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been initiated. The said provisions read thus : "158BD. Undisclosed income of any other person.-Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed under section 158BC against such other person and the provisions of this Chapter shall apply accordingly. 158BE. Time limit for completion of block assessment.-(1) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation for the purposes of this section,- (i) the period during which the assessment proceeding is stayed by an order or injunction of any court ; or (ii) the period commencing from the day on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending on the day on which the assessee is required to furnish a report of such audit under that sub-section ; or (iii) the time taken in reopening the whole or any part of the proceeding or giving an opportunity to the assessee to be reheard under the proviso to section 129 ; or (iv) in a case where an application made before the Settlement Commission under section 245C is rejected by it or is not allowed to be proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd and seized/requisitioned ; (b) the Assessing Officer should record a finding that there was undisclosed income in such assets or books of account or documents of the searched person which belonged to the person other than the one searched. 6. According to the plain reading of section 158BD ibid, the Assessing Officer, while framing the assessment of an assessee under section 158BC of the Act against whom action has been taken under section 132 or 132A of the Act is mandatorily required to record satisfaction before action can be initiated under section 158BD of the Act against such other person. In other words, the satisfaction by the Assessing Officer making assessment under section 158BC of the Act, in the case of the person se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty to a search, is necessarily to be during the course of block assessment proceedings under section 158BC of the searched person. It cannot be after the conclusion of the same as there is no occasion for an Assessing Officer to examine the seized material or documents of the searched person when the block assessment proceedings have concluded and no other proceedings are pending before him. If any other time limit is read in the provisions/statute, it shall lead to anomaly and would be arbitrary and unreasonable. It could not be read in the provision that where block assessment under section 158BC of the Act in the case of an assessee against whom action under section 132 or 132A of the Act had been carried out is finalized, the Revenue c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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